High yuan costs jobs: ACTU

Newly acclaimed finance minister of the year
Wayne Swan
should use the mantle to put pressure on China to remove its currency controls, ACTU president
Ged Kearney
says, after one manufacturer cut its workforce by one-third because of the foreign exchange policy.

The Treasurer should step up for Australian manufacturers, which had been hit hard by China’s policy of holding down the value of its yuan, making its exports more attractive on global markets, Ms Kearney said at the jobs forum in Canberra yesterday. “There is no doubt China’s currency is having an impact," she said.

“It is artificially maintained, and whether or not Australia can influence that or not I’m not sure, but I certainly do think that as we have the treasurer of the year, perhaps he could use his influence with some other nations in the G20 to actually start putting some global pressure on China about their currency."

Phil Jobe
, the managing director of Parramatta-based Capral, said China’s currency policy was responsible for shrinking the workforce at Australia’s biggest producer of aluminium products to 900, from 1400 two years ago.

“The yuan is something I have put on the table today as an issue for the forum, as it has seen us shrink our workforce by hundreds,’’ Mr Jobe said at the jobs forum. “It could cost us our manufacturing heartland."

Capral, which provided one-third of the country’s aluminium products, including doors and window frames, was representative of all manufacturers grappling with cheaper Chinese imports, he said.

“Our business will continue to decline, just like other manufacturers trying to grapple with the Chinese currency issue," Mr Jobe said. “The international community needs to put pressure on China to have a market-based exchange rate, even though I think that is unlikely."

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AI Group chief executive
Heather Ridout
said manufacturers were also trying to deal with a stronger Australian dollar, which had fallen in recent weeks because of global market volatility.

“Manufacturers and all trade-exposed industries will clearly welcome a more competitive currency – but how long it lasts, what’s driving it, these are really big uncertainties," Ms Ridout told ABC television. “I think it is just adding to the volatility and uncertainty facing business."

Ms Kearney said she wanted to see a long-term process in which unions could sit down with employers and the government.

“A one-day process like this is not really going to achieve a great deal," she said.